Oil steady above $48 on MidEast and Russian tensions

By Jennifer Tan

SINGAPORE (Reuters) - Oil was steady above $48 on Tuesday after rising 5 percent overnight, as Israel's deepening incursion into Gaza and a spat between Russia and Ukraine over gas prices stoked fears of severe supply disruptions.

Oil prices have risen about 50 percent since the intraday low of $32.40 reached on December 19, also boosted by mounting evidence of OPEC's compliance with production cuts.

U.S. crude for February delivery was down 11 cents a barrel at $48.70 by 2:45 a.m. British time, after hitting a three-week high of $49.28 on Monday.

London Brent was down 10 cents at $49.52.

"I would expect choppy, sideways trading for oil prices, largely because of the Russian gas row and the Gaza conflict, and until a clearer picture on the economy and supply-side issues emerges," said Tony Nunan, risk management executive at Tokyo-based Mitsubishi Corp.

Israeli troops backed by air strikes fought to seize ground from Hamas militants deep inside Gaza on Monday, despite international calls for a cease-fire in a conflict that has killed more than 540 Palestinians in 10 days.

While the violence does not directly threaten any oil supplies, the risk is it could engulf other Middle East countries that produce a third of the world's crude.

Adding to geopolitical concerns, Russia reduced gas flows to Europe via Ukraine on Monday, a measure it said was to stop its neighbour siphoning off fuel, but which Kiev said could jeopardise supplies to European countries including Germany.